Bloom Energy claims that it will be an unstoppable force in the alternative energy business and its got huge corporate support

The
future of energy is now, says Bloom Energy. At a press
conference today, it unveiled its surprisingly small fuel cell
"solutions" boxes. The so-called "Bloom Energy
Servers" – which are about as tall as an adult male – can
use virtually any hydrocarbon fuel (methane, propane, ethanol,
gasoline, liquified coal) and produce energy twice as efficiently as
a coal plant. Bloom Energy is trying to revolutionize the power
generation industry – the key is cutting out the middle-man (power
transmission) and embracing a modular design akin to servers, the
backbone of the internet.

The company's fuel cell boxes are
composed of ceramic (sand derived) discs and special ink. It
garnered
attention earlier this week when it was featured on the CBS news
program 60 Minutes. While many alternative energy
startups have struggled to find financial backers, it already has
publicized major support from some of the tech industry's biggest
names -- Google, eBay, Fedex, Staples, and Walmart.

At
the event it announced that its fuel cell generators emit 60 percent
less carbon per unit energy than a traditional coal power plant.
And unlike a coal power plant, the power is produced on site so there
are no grid losses. The whole process can be carbon neutral if
the hydrocarbon source is an organic such as algae or switchgrass
ethanol (as opposed to fossil fuels).

K. R. Sridhar, the
ex-NASA researcher who founded the company says that he initially
developed the technology to power Mars colonies, but in the end it
proved too compelling not to offer on Earth. He states, "After
spending a decade of working on this, I had to look back at our first
home. While I was dreaming about Mars and our colonies, historically
unprecedented things had happened on Earth. For me, it was
really a composite image of... a bright world and a dark world. It
was the image of the world of haves and the world of have nots. Those
who had the opportunity for economy growth and those who were denied
that."

He said the company was founded to provide the two
billion people worldwide without access to affordable power a new,
affordable energy source.

The result he obtained was a fuel
cell that went from "powder to power" and was "twice"
as efficient as traditional power plants due to the on-site scheme
eliminating grid losses. In his designs, a single fuel cell
disc produces 25 W; a "stack" composed of multiple cells
produces 1 kW; a "module" produces 25 kW; and a
corporate-ready "system" produces 100 kW. A corporate
"solution" (consisting of several Bloom Energy Servers or
"systems") supplies up to 1 MW of power.

The
power is continuous and flexible, unlike solar or wind energy.
As Mr. Sridhar describes, "This is not when the sun shines, this
is not when the wind blows... that's how this little piece of sand is
different than what's been done before.""

The real
flesh of Bloom Energy's plan, though, is its planned consumer debut
which will be carried out over the next few years. Bloom aims
at providing consumers with $3,000 units that will produce enough
power to support the average home at minimal fuel cost. It
plans to push the power generation industry towards the same model
that made the internet so fabulously successful -- server-based
scaling. In fact, it refers to its products as energy "servers"
-- entirely flexible, modular power units.

The units (of any
size) pay back their cost within 3 to 5 years and they will operate
efficiently for 10 years (at which point they would presumably be
serviced with new catalyst material, i.e. new fuel cell discs).

At
the event Bloom Energy mentioned several more big backers --
Coca-Cola, Bank of America, Cox -- that
have embraced the company's power generators [PDF]. Many of
these backers -- including John Donaho of eBay, Bill Simon of
Walmart, Brian Kelly of Coca-Cola, and Google's Larry Page – spoke
at the event expressing their wild enthusiasm for Bloom Energy's
delivery. Describes Donahoe, "It was almost too good to be
true."

With that kind of corporate support, it's hard not
to buy in to the hype. One thing that Bloom Energy did not note
was that most of the adoption thus far has been in California where
tax breaks could discount the Bloom Energy Servers by as much as 20
percent. With an additional 30 percent federal tax break for
"green" investments, the costs could be cut even further.
Still, even without tax breaks, if the company's payoff numbers and
reliability are as good as it says, the units could enjoy market
success. If that's true, that's great news for the startup and
a rarity in this business segment.

There are still some
unresolved questions, however. What exactly is the secret
"colored inks" that Bloom Energy paints its cells with and
are so great at catalyzing the production of energy from hydrocarbon
fuels? Bloom Energy still hasn't revealed the formula (perhaps
it's patent pending). Still, it today offered a lot more
details on its big corporate backing, its efficiency numbers, and its
plan for consumer rollout. It's definitely going to be a fun
ride watching this one in years to come.

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Not too many coal plants are going to be running at 45% efficiency. Typical is going to be more in the 30-35% range. High-temperature fuel cells have can hit 60% or better, so if one takes the lower range of efficiencies for coal plants then 'twice' is pretty close.

Interesting how they include efficiency of the electrical delivery network (grid loss, etc) but simply ignore the inefficiencies and delivery costs that would be imposed by this paradigm change. Whether it be beefing up existing NG delivery systems, having to tanker in more LNG in from middle east, installing alternative fuel pipeline(s) or bringing back local LPG trucking in fuels and storing them on site tanks like they used to do in rural and suburb areas in the 60's.

Also assuming such technology does take off (due to continued "green" subsidies being used pick the winners) the electrical grid will become even less efficient and the economics of the conventional power grid will be stressed towards the point of collapse. So we feed subsidies to favored "green" industries to collapse the "brown" economy. Yeah, sounds like we are in for some "change".

quote: The real flesh of Bloom Energy's plan, though, is its planned consumer debut which will be carried out over the next few years. Bloom aims at providing consumers with $3,000 units that will produce enough power to support the average home at minimal fuel cost.

$3,000 for a single home, while intriguing, is still too steep. I doubt most homeowners, especially during these hard times, are interested in spending an extra 3 grand for power when they are currently paying $40/month for their power. In addition, the homeowner must also hook up this unit to his gas supply and pay an increased gas bill. Natural gas used to be cheap. However, about 10 years ago, its cost skyrocketed. I personally have set my thermostat at 57F and rarely use my heater to keep my gas bill down.

Even as an emergency power generator, $3,000 is too high. A simple gasoline-powered generator costs about $350. This is enough to power your refrigerator to keep your food from spoiling and power a few lights while your electric company works to restore your power. I mention this because this is what happened to me in 2002. 60 MPH winds blew down power polls and knocked out power for 10 days. We were forced to BBQ all our meats, bake our tater tots, and give them to the power company workers. B^D

If I could buy a power plant that provided monthly savings, $3k would be a trivial cost to pay. Heck, a used car is more than $3k. But I don't believe the hype. Big corporations often do something not because it's cost-effective but rather because it makes them look socially responsible or trendy. Me, I could care less. I want lower net costs, and even with huge government subsidies fuel cells don't pencil out.

Also, natural gas did indeed take a huge jump a few years ago--and then fell back just as fast. I think current costs are about 1/3 what they were a few years ago.

Finally, are you serious? 57 degrees? Do you advise your visitors to bring parkas?

Ever heard of Financing? People will finance if you can show a definite savings in excess of their power bill. Here in Florida, a normal house, in summer, has a $225 electric bill, and our state is about to approve a 35% increase to those bills.

If they can show that an homeowner with at $250/month electric bill can cut that by more than half if not most of the way, then $3,000 is only a small investment toward the goal of energy independence. The more homes and corporations you get off the grid for dependence the faster your state can become neutral on energy or even an exporter.

It seems he's claiming about a 65-70% effiency figure, which is in the range of the best solid oxide fuel cells. So its feasible...though I'm guessing only economic at present due to the large state and federal subsidy. That may change if they can manufacture the boxes cheaper at some future point in time.

And yes, line losses average about 7% in the US. In Calif, I think they're closer to 10-12% though, thanks to that state refusing to generate its own power, and instead ship it in from out of state.

Putting my EPE hat on for a minute, there are a couple of interesting details omitted in the story. First, how long to start up a cold stack? I'm guessing based on the information supplied, it is probably around 2-5 minutes given the system architecture. Much longer to start cold system I suspect, but the average user won't do that often.

Net/net, my guess is that if a power company installs these, they will treat the power produced as 10% or so base load (generated basically 24/7), another 15 to 20% swing load (bringing the system to where it can operate at 100% on demand) and the remaining 70% as peaking power. (Basically instant response.)

Now let's look at cost. Current pricing is not quite competitive, but that is not a surprise. As everyone in the computer industry knows, staying on "the bleeding edge" costs. Not just in system pricing, but in the headaches you buy into with beta hardware and software. Unfortunately, someone has to be out there, or there wouldn't be any progress, Large companies invest in prototype and beta systems (for test environments) to be able to field the systems faster when the technology is ready for production use.

The stated cost of a Bloom Box today is clear, the power produced though is not. "Bloom Energy said a single one of its units would power about 100 homes and cost $700,000 to $800,000, but did not disclose how much natural gas would be needed." http://www.businessweek.com/globalbiz/content/dec2... "Each Bloom Energy Server provides 100 kilowatts (kW) of power in roughly the footprint of a parking space. Each system generates enough power to meet the needs of approximately 100 average U.S. homes or a small office building." http://c0688662.cdn.cloudfiles.rackspacecloud.com/...

How does 7-8 thousand dollars per kilowatt look to a utility as a peaking power cost? High, but given low fuel costs, tolerable. Assuming Bloom can get it down to $2000 per kilowatt ($200,000 per 100kw module)? Now it is competitive with even the cheapest base load units, and lower fuel costs make it a slam dunk. (Nuclear is in the $4k and up range, solar and wind over $10k.) Can Bloom get its prices that low? Sure. ;-) I don't think a system weighs much more than 20 tons, and $5/lb. covers some pretty heavy production costs. (I'm assuming that the copper parts in the system will be the most expensive component by weight.)

So once they get system costs under $500,000 I would expect utilities to get very interested. At $350,000? Bloom should concentrate on making the modules and license the rest. Utilities will be buying them as fast as they can be produced, and companies like GE have the experience in selling into the electric power industry, plus the necessary experience to make the system life in decades, without blowing up. (There is little or no risk of that in a situation like they are selling into now. But in a "real" grid power providing installation, you have to deal with things like lightning strikes on power lines--or the module itself.)

Right now, anyone go out and buy a 100 kw Generac "mobile" NG generator for less than $25,000 (I'll use 25k for easier math). That's 28-35 times less than the 100 kw Bloom unit and the same size. Oh, and that's $250 a kilowatt and only weighs 2700 lbs.

Also the Bloom is "only" twice as efficient as "normal" means, and some portion of that is due to being located closer to the point of use. Well, the Generac would be on site, too, so it would also "gain" that same amount of efficiency. So now the Bloom is less than 2x as efficient. There is no way a Bloom is going to pay for itself in 3-5 years with numbers like this. Also, conveniently not considered, as others have pointed out, is the cost of NG infrastructure, etc. You'd be lucky to recover your costs in 14-18 years. That's also assuming that the Bloom units don't loss any efficient through out their lifespan.

Further, the units operate at 1000 C. Where's all the waste heat go? Do we have 100% efficient insulators now too? What's the mean time to failure at those temps? How does it fail? Does it melt through the floor, explode, or just cool off quietly?

So even at $500,000 one can buy 20000 kw of power capacity, not just 100 kw. And that can be ramped up and down in 100 kw chunks as needed. Even at your stated target of $2000 a kw, no one should be interested when the conventional means are an order of magnitude less expensive. Unless noise is your issue. They should be ideal in that department.

What's disquieting is that everyone thinks that Bloom is a miracle or something that's ready for 100% deployment. It's not. It's way overpriced for the level of efficiency and output that it produces. I see no solid evidence fuel usage or efficiency vs current methods warrant $700,000 / 100 kw prices. What is interesting is no moving parts, ultimately small point source like size. It has a niche, but it's not going to replace every current power plant. Get the price down to $50,000 / 100 kw (or less) and then they'll be replacing on-site power generators everywhere, as backup units but not main power sources.

At least until the NG runs out. We could make more methane, but aren't we trying not to, because cows, um, you know, is bad right? If it ran off hot air we could hook them up to politicians and have an infinite source of energy. :-)

While my gut reaction was to go with the "environuts" comment, it's strange I can find with a few simple searches 68 dealers of Residential, Commercial, and Industrial Generac branded generators, in California, selling exactly the type of natural gas driven generator I used as a reference. I can also find 46 dealers offering service of said same generators.

I'm going to have to assume with that many dealers selling in California that their target customer is also in California, not some other state. (There's possibly more such equipment being sold in California, as these were only those listed as selling Generac brand equipment and does not count those who sell other similar equipment but is not Generac branded).

The operating temperature is 1000C. However, assuming a 66% efficiency, a 25kW stack would produce internal heat in the order of 12 kW (that's in excess of 42 000 BTU per hour in heat). The issue would not be keeping the unit at operating temperature with any kind of decent load (>20%), but to cool it. As for the mobile natural gas generator, you pay 30 times less capital costs and twice the operating cost. I don't know how long the Generac will run, and the loss of efficiency during the life time is probably at around 10-15% (wear on turbine, increased resistance in electrical contacts, loss of magnetic efficiency).

ArcliteHawaii said: Yeah, modern coal plants are 45% efficient. Is he claiming 90% efficiency? If so, that would be incredible, as no electric generation has efficiency greater than 60% currently.

Grid losses are only 7% on average nationwide, so this isn't a huge selling point.

I'd love to buy a coal plant that came close to 45% without co-generation, or use of the spent steam in an industrial process. (And I have, "Been there and done that," with gas turbine generators and steam cogeneration. (But they were very inefficient when burning gasified coal.) I was also an executive for a fabric converter (dyeing, printing, etc.) where we did experiment with running one boiler at much higher steam PSI and through a turbine to reduce electricity costs. (Net result was really that we didn't use enough electricity to make it pay well. Back then, if we sold power to the power company, that might have worked. Instead, they had a nasty rate that charged us for peak usage in any one hour period in the past year. Shut the power generator down for maintenance, and we'd have to shut the whole plant down for the same period to realize any savings.)

As for 7% being negligible, power companies spend billions on capital investment to keep it that low. Bloom's approach will both reduce that number, and reduce total investment in electricity production over time.

There are other modes of operation, but I expect many of the Bloom units, and all of the initial units to run on natural gas or an equivalent. And I know of a lot of landfills which would love to supply methane to one of these units. ;-)

Lots of good points have already been made in response to this... But there's another factor. "Twice as efficient" is an inaccurate phrase; what most people mean when they say a process is twice as efficient is that it has half the inefficiency. So if a process was "twice as efficient" as a 45%-efficient process, it would actually be 72.5% efficient. Oddly enough - that's almost in the range they're claiming!

In fact, given that they're claiming efficiencies of 65-70% (believable for solid-oxide fuel cells, I think), that's equivalent to claiming an efficiency range of 30-40% for standard coal plants... which seems to make sense to me.

Taking the low end of their claimed range, 65% efficiency, Bloom is claiming no more than 35% losses for the Bloom Box.

For the current power system, if we want twice that in losses (70%), we get the following equation for total losses (x being efficiency, (1-x) being losses): (7%)*x + (1-x) = 70%, or equivalently,

0.93*x = 1 - 0.7 = 0.3.

Solving, we find that the claim that the box is "twice as efficient" (if the box is 65% efficient) would be literally true if modern coal plants were ~32.25% efficient.

If we instead assume the box is 70% efficient, coal plants could be as much as ~43.01% efficient.

More generally, for a point-of-use system to be twice as efficient as the current grid, we would have g*c + (1 - c) = 1 - 2*x, or

(1 - g)*c = 2*x,

where g is grid losses, c is the current efficiency, and x is the efficiency of the new system.

Thus, if you can accept that coal plant efficiency is somewhere between 30% and 45%, Bloom Energy's claim is surprisingly reasonable! At least, I dismissed it out of hand at first, then did the calculations... and I was surprised.

Key thing it doesn't say it is TWICE AS EFFICIENT. The claim is half the emissions. Given coal has high emissions that is kinda meaningless.

Another article indicates electrical efficiency is 48%.So it is no more efficient than natural gas turbine however you are saving on transmission losses, retail markup, and transmission costs (as in $$$). Generation is only roughly half the per kWh cost of electrical power.

I ran some numbers and at $10 per ccf for Natural gas we are talking about $0.07 per kWh. Not too bad.

However the real advantage is it a 100KW unit will generate 368,600 BTU of heat. If that can be captured at say 80% efficiency (heat exchanger) that is 300,000 BTU of "free heat".

That would reduce overall energy costs (electricity + water heating + building heating).

So if you can use all the heat that brings you down to around $0.05 to $0.06 per kwh.

Considering that the working temperature is 1000C, your waste heat can be hot enough for any practical purposes. So yes, you have a better system than a natural gas turbine (more electricity, higher temperature for the waste heat)

How you should really ask that question is compared to the different kinds of power plants we have to choose from.Coal power plants are the dirtiest spewing out a lot of pollutants, but their efficiency is usually very high (40-60% of thermal energy converted to electrical energy).

Interesting.I would like to see a full expected cost of ownership breakdown as well as actual raw efficiency numbers.If they are claiming 90% efficiency... I am assuming that is just thermal efficiency - what about cost benefit/Roi breakdowns? These numberless claims are wow factors likely based on only arbitrary statistics.3-5 year payback for consumers... what consumers? based on what cost of electricity? what cost of fuel? what average electricity usage? Does this consider maintenance costs (if they exist and and what they are?)

A good clue is the CA roll-out first. This is the biggest RED flag IMO. It screams tax-subsidized, and as the article alluded to it is. Can it stand on it's own without them, I highly doubt (so there goes any longevity).

More importantly do you want your tax money going to fund a bunch of private power plants or perhaps some newer coal/nuclear/solar/wind/natural gas plants. I would be absolutely shocked if they could obtain efficiency's with the home unit that would surpass the relatively minor grid losses. It would be a good back up generator, but I don't think every home generating it's own electricity is the most effective model. Now if they want to build a plant sized version, and can improve over existing tech, then by all means use my tax dollars. Just don't see the everyone generating their own thing as good though.

One of Blooms Patents is for an Solid Oxide Regerative Fuel Cell which can take electricity combined with water and CO2 and make fuel that can be stored and reused later. The current systems to do support this feature but is something they are planning on.

"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer